Swiss lawyer's guilty plea helps U.S. tax evasion inquiry

A Swiss lawyer has pleaded guilty in a U.S. probe of offshore tax evasion and has been telling prosecutors how he helped American clients use secret accounts to hide assets from the Internal Revenue Service.

Edgar Paltzer, 57, admitted last week in federal court in New York that he conspired from 2000 to 2012 to commit tax fraud by helping U.S. clients hide millions of dollars from the IRS. He was indicted on April 16.

Paltzer's lawyer, Thomas Ostrander, said his client is cooperating with U.S. authorities in their broader investigation of how foreign banks and advisers helped American clients evade taxes. Paltzer's cooperation offers U.S. investigators a rare inside look at how Swiss bankers and advisers used sham trusts and corporations and moved cash and jewelry across borders to hide their assets from the IRS.

Since 2008, the U.S. government has charged at least 90 people in a crackdown on offshore tax evasion, including two dozen bankers, lawyers and advisers. Paltzer admitted that from 2000 to 2012 he acted as a financial intermediary and helped dozens of U.S. taxpayers avoid their duty to pay taxes on worldwide income.

"I intentionally formed foundations and corporations which permitted these U.S. taxpayers to hide from the IRS these accounts and the income earned in these accounts," he said. "I assisted these taxpayers in violating their legal duties. I was aware that this conduct was wrong."

Paltzer, who holds dual U.S. and Swiss citizenship and is licensed to practice law in New York, is returning to Switzerland for now, his lawyer said.

Paltzer agreed to pay restitution and forfeit fees he earned from his crime, which carries a potential five-year prison term. As a cooperator, he would probably get less time.

Prosecutors have agreed to submit a letter to the sentencing judge outlining his assistance to the U.S.

The U.S. crackdown accelerated after 2009, when UBS, Switzerland's largest bank, avoided prosecution by paying $780 million, admitting it aided U.S. tax evasion and handing over data on 4,500 accounts.